South Korea’s cabinet has approved the enforcement decree for legislation governing its $350bn investment commitment to the US, due to take effect on 18 June.
The decree establishes the operational framework for the investment package, which was agreed last October in exchange for reduced US tariffs.
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The package is divided into $150bn earmarked for shipbuilding co-operation and $200bn directed at strategic sectors.
Under the terms of the decree, a project will be considered commercially viable if the income attributed to South Korea over its lifetime is sufficient to recover both the principal and interest on the investment.
That calculation will be pegged to 20-year US Treasury yields plus an additional spread negotiated between Seoul and Washington at the point of each investment’s initiation.
According to a report from state-backed Yonhap News Agency, the decree also creates a special investment committee, to be chaired by the trade minister, responsible for reviewing and approving projects on the basis of commercial viability, legal considerations and expected returns.
Separately, South Korea will establish the Korea-US Strategic Investment Corporation, which will operate over a 20-year period.
The government will contribute 2tn won ($1.3bn) as the founding capital for the entity.
The underlying legislation – the Special Act for Korea-US Strategic Investment Management – was passed by the National Assembly in March, following unanimous committee endorsements.
Seoul said it would move to accelerate the decree’s promulgation to support the programme’s rollout.
The National Assembly vote came as US President Donald Trump pursued a fresh tariff probe.
That same month, the United States Trade Representative launched investigations into the trade practices of 60 major trading partners concerning the enforcement of bans on goods produced with forced labour, with South Korea among the countries under review alongside China, India, the European Union, Japan, Brazil, Australia and Canada.
